TONY HETHERINGTON: Standard Life sneaks in age bar for bond

H.J.L.writes: I was sold a Standard Life savings plan in 1989. It lasted for ten years, with an option to renew for a further ten years, and so on. My intention was to let it run for 30 years in total. I was pleased with the results so in 1999 I renewed the policy. I was also pleased in 2009, but this time Standard Life rejected my renewal as it would take my investment past my 85th birthday. This age limit was never mentioned in 1989. It does not appear in the policy terms, and when I renewed in 1999 I was assured I could renew again in 2009.

Complaints about life companies are typically from people who are disappointed with the return on their policy.

Yours stands out because you have been so happy with Standard Life’s performance that you wanted to leave your savings unchanged well into your retirement years, yet you were turned down by Standard Life itself in very dubious circumstances.

Questions: Standard Life's headquarters in Edinburgh

You told me that in the Eighties you wanted a long-term investment that would need little or no monitoring. You could just sit back and let your savings grow.
The Standard Life bond seemed ideal. Nobody mentioned any age limit. You were told you had the option to renew every ten years, so you signed up. And in 1999 you specifically checked again on this very point.

Standard Life told you: ‘You can go on benefiting from our investment experience by paying premiums into your plan for another ten years.’
And crucially, the company’s letter added: ‘At the end of the extended term, if all premiums are paid in full, all the options described here will be available to you again.’ This was false.

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In 2009, you were told you could not reinvest as you were too old. And Standard Life tried to wash its hands of responsibility for anything you were told in 1989, saying this was down to the local advice firm that recommended the bond – a firm that ceased trading years ago so cannot now be questioned.

Standard Life can be questioned, of course, so I asked what had gone wrong. It admitted its 1999 advice was a mistake, but said this was ‘an isolated incident’, and that ‘the age restriction is stated in the product’s policy provision’.
Well no, actually, it isn’t.

The policy provisions simply say that investors can extend the bond for a further ten years.
Standard Life then tried to convince me this meant you could renew for just one ten-year extension, saying: ‘Mr L’s age was not a reason for the restriction in continuing the policy. Even if, for argument’s sake, he was only 55 at the time, he would not be allowed to take the policy out for another ten years.’

This just muddied the waters even more. You had complained to the Financial Ombudsman Service, and it had been told by Standard Life that – guess what – it really was your age that was the problem. So which version was the truth?

Finally, Standard Life produced the sales guide it said was available to your adviser in 1989. It is badly written and ambiguous. It says that you can invest ‘any time up to your 75th birthday’ and that after ten years, you have ‘the option to continue your bond for a further ten years’.

This suggests that if you are through the door before age 75, you can stay in the scheme by renewing. But Standard Life sees it as a ban on renewing.
When I pointed out Standard Life had told me one thing and the FOS another, the insurer went back to saying that there really was an age restriction.

Disappointingly, the company and the FOS have treated this as a mere inconvenience, rather than someone chucking a hefty spanner into your long-term plans. You were offered £100 compensation. This has been increased to £300, which I still feel is far too little.

Standard Life is a decent company, but the affair leaves a question mark over its long-term schemes. If sales literature written decades ago is unclear, should this favour the company or the client? I would choose the client every time. If there is ever any doubt, the benefit should not go to the company.

DIY account transfer put cash at mercy of taxman

Ms R.H.writes: I opened an Isa with Santander, with a view to transferring three years of savings held in my Halifax Isa. I used the Halifax online facility to transfer £18,000, but a few days later I found that Santander had rejected it because it was above the amount that could be invested in one year. Halifax said that it was unable to take the money back into its Isa, and gave me a cheque.

The golden rule with Isa accounts is that once your savings are taken out, they lose their tax-free status, even if you immediately walk down the street and try to deposit them into an Isa with a different bank.
The cash can only be moved directly from Isa to Isa, bank to bank, without you handling the money even for a second.

Sadly, instead of asking Santander to arrange the transfer, you instructed Halifax to make an online transfer, in just the same way as you would have paid a personal bill or transferred cash to another person.
This was enough to put the money under your personal control – and outside the tax-friendly Isa system.

Santander has told you it is happy to accept the one-year maximum Isa savings contribution of £5,640. But after going over the events with both banks, I have to agree that neither of them has done anything wrong.

Is that your mobile phone wringing?

R.J.B. writes: My wife and I joined NatWest’s Advantage Gold account scheme three years ago, paying £12.95 a month. Last week, I left my mobile phone in my trousers and they were put in the washing machine. Obviously, the phone no longer worked afterwards. Advantage Gold insures mobiles so I contacted NatWest. I was shocked to find there was a £25 excess and I had to send the original receipt to a different insurer, which now wants the phone for analysis.

Meanwhile, I have bought a similar phone, but the insurer says it will attempt to repair the old one or may supply a reconditioned phone of its choice. After searching for an explanation, I was pointed towards the smallest of website clauses. I complained and NatWest offered an ex gratia payment of £30, leaving me £40 out of pocket.

Out of pocket: Claims clash

Advantage Gold is a packaged account that bundles together banking services and add-ons such as car breakdown recovery. I know you were also unhappy to discover that what you thought was a comprehensive AA-type service only paid for towing your car for ten miles, and left you to pay for anything further.
The Financial Services Authority is also unhappy over packaged accounts.

Director of policy Sheila Nicoll said recently: ‘These are often referred to as upgraded accounts but if you end up paying for an element you can’t claim on, it’s money down the drain.’

Tighter rules will soon make banks check that insurance they recommend is really suitable for customers.
I asked NatWest to reconsider your claim. The bank says information about the £25 excess is on its website and in the welcome pack supplied when the account is opened. It is also repeated when customers register their phone for cover.

However, staff agree your claim has been badly handled. A further £70 is being credited to your account as compensation.